lizbjrddnr

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So the boyfriend (hopefully with some intent in mind) asked:

"Does a spouse share the debt a med student incurs during med school?" (i.e. if get married after med school, does spouse now legally share that debt?)

Thanks, if anyone has any idea!
 

liverotcod

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Yes. In the absence of a pre-nuptial agreement, all assets and liabilities of the couple are shared after marriage. At least in most states; there are a few, I believe, where this is not the case. Wisconsin, perhaps?
 

Law2Doc

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liverotcod said:
Yes. In the absence of a pre-nuptial agreement, all assets and liabilities of the couple are shared after marriage. At least in most states; there are a few, I believe, where this is not the case. Wisconsin, perhaps?
Livertocod is correct that the answer would depend on the state you are in, and that a prenup would go a long way to resolve this in many states. There are certainly some states where all debts are shared, others where just marital debts are shared and separate debts may not be. The answer could depend on whether the debt was incurred prior to the union in some states. It could also depend on whether the state case law deems a professional degree as "marital property" or a "marital asset" (which determination would benefit the non-degreed spouse in the event of divorce). Thus there is no quick answer, and if this is something you are concerned with, you may have to seek advice of a lawyer in the state in which you will set up your household.
 

liverotcod

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So, which do you prefer: a pre-med's half-a$$ed answer, or the long-winded monologue of a real lawyer?

:D :D (great answer, Law2Doc!)
 

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Take out some life insurance too. Leaving your family with all your student debt if you keel over on the first day of being an attending isn't very nice.
 

liverotcod

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Graat said:
Take out some life insurance too. Leaving your family with all your student debt if you keel over on the first day of being an attending isn't very nice.
That's a pretty good idea. Would you suggest term insurance for that, extending through the repayment period?
 

flash

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absolutely...never buy whole.
 

lulubean

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On the topic, if my bf and i get married, will that reduce the amount of financial aid i am eligible to receive (b/c of combined incomes)? is it advisable to hold off until i am done with med school?

thanks!
 

Graat

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liverotcod said:
That's a pretty good idea. Would you suggest term insurance for that, extending through the repayment period?
Yes, I just got a 25-year term for $250k, costing me $200 per year. I originally planned on only getting a 10-year term, but the premiums are so cheap for young healthy folk, that I decided to extend it rather than trying to renew when I'm 37.
 
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lizbjrddnr

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Thanks everybody for your input. The specific states that I'm interested in are Ohio and Illinois- any specifics that you know about?
 

partial

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"Yes. In the absence of a pre-nuptial agreement, all assets and liabilities of the couple are shared after marriage."

That is not true. Your partner is not legally responsible for the debt you acquired on your own prior to the marriage. However, if you default on that debt the creditor can sieze joint assets to cover a default premarriage debt. Keep your finances seperate. If you buy a house together, and you default, they can take his share of it.
 

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What happens to student loans with the death of the borrower?
 

DrMom

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Pembleton said:
What happens to student loans with the death of the borrower?
Last year a resident here was killed in a car accident. I was told that the loans were forgiven by the government.
 

Pembleton

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DrMom said:
Last year a resident here was killed in a car accident. I was told that the loans were forgiven by the government.
Was he married too? If yes, then I guess his debt wasn't transferred to his spouse.
 

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lizbjrddnr said:
So the boyfriend (hopefully with some intent in mind) asked:

"Does a spouse share the debt a med student incurs during med school?" (i.e. if get married after med school, does spouse now legally share that debt?)

Thanks, if anyone has any idea!

I do not know about the debt. However, if you and your wife (husband? I do not know) divorce before you become a doctor (eg during our residency), then not only she is entitled to 50% of what you own, but also 50% of your future income as a doctor.

That is why of all the professionals, doctors tend to marry other doctors.
 

Febrifuge

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lulubean said:
On the topic, if my bf and i get married, will that reduce the amount of financial aid i am eligible to receive (b/c of combined incomes)? is it advisable to hold off until i am done with med school?
Possibly, but there are more important things, and this should be construed as my opinion, not advice.

Federal loan calculations of your "Expected Family Contribution" would be based on the income from the previous tax year, for both people, in the event of a marriage. (This is super fun when we have to explain why we need 2003 tax info for someone's spouse when the wedding was in March of 2004... the fact is, in figuring 2004-05's info, we need 2003 tax stuff.) On the other hand, your EFC is more a factor in finding "need-based" aid than it is in calculating the total aid you can receive. That's a function of how much school actually costs.

In my capacity as a financial aid geek (it's my day job) I would never tell anyone not to get married. As a divorced guy... :smuggrin:
 

Febrifuge

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Pembleton said:
What happens to student loans with the death of the borrower?
Federal student loans are forgiven.

(But give this Congress some time, and they might change that too... don't get me started on their recent "improvements" to federal student aid programs.)
 

DrMom

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Pembleton said:
Was he married too? If yes, then I guess his debt wasn't transferred to his spouse.
It was a she & she was married with 3 kiddos. No, the debt wasn't transferred from what I was told.
 

japhy

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sorry partial, but you are wrong on the law. it depends on whether you are in a "community property" state or not. however, in many cases once you are married you assume the debt of your spouse.
 

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Without Wax said:
I do not know about the debt. However, if you and your wife (husband? I do not know) divorce before you become a doctor (eg during our residency), then not only she is entitled to 50% of what you own, but also 50% of your future income as a doctor.

That is why of all the professionals, doctors tend to marry other doctors.
Sheesh! If it came down to that, it might actually be time to move to Australia or something.
 

partial

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"sorry partial, but you are wrong on the law. it depends on whether you are in a "community property" state or not. however, in many cases once you are married you assume the debt of your spouse."

I'm sorry but you are wrong. In community property states money earned by a spouse during a marriage and anything of value purchased with that money is the property of the couple. However, married people can still own seperate property. The property (including liabilities) you bring into the marriage are seperate property. Any property you inherit individually is owned individually. Only individual property that becomes so mixed with the community property that it becomes indistguishable will switch from individual property to community property.
 

Law2Doc

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partial said:
"sorry partial, but you are wrong on the law. it depends on whether you are in a "community property" state or not. however, in many cases once you are married you assume the debt of your spouse."

I'm sorry but you are wrong. In community property states money earned by a spouse during a marriage and anything of value purchased with that money is the property of the couple. However, married people can still own seperate property. The property (including liabilities) you bring into the marriage are seperate property. Any property you inherit individually is owned individually. Only individual property that becomes so mixed with the community property that it becomes indistguishable will switch from individual property to community property.
I have to way in as well and say that in both this post and your prior one, you are not giving advice that is not true in all 50 states... Thus you may be correct in your own state, but as a blanket rule you are frankly off base.
(Both in terms of purporting to have a "separate debt" associated with a professional degree that conceivably might be considered a "marital asset" if earned during the marriage, and your reference to an inability of one to foreclose on the entire house of a married couple for the debt of one -- as that really depends on whether the ownership is tenancy by the entirety, tenancy in common, or joint tenancy, and not all states permit all three).
 

uclabruin2003

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i think the loan depends on the loaner whether the debt is forgiven if there is a debt for school-related expenses. case does need-based loans where if you die then they are forgiven. its nice to know that you wont carry your loans to your grave.
 

partial

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"I have to way in as well and say that in both this post and your prior one, you are not giving advice that is not true in all 50 states... Thus you may be correct in your own state, but as a blanket rule you are frankly off base.
(Both in terms of purporting to have a "separate debt" associated with a professional degree that conceivably might be considered a "marital asset" if earned during the marriage, and your reference to an inability of one to foreclose on the entire house of a married couple for the debt of one -- as that really depends on whether the ownership is tenancy by the entirety, tenancy in common, or joint tenancy, and not all states permit all three)."

I was willing to let the last poster off because I assumed that person was not a lawyer. However, I am one and so are you, so this will be short.

First, I am not off base about debt as an individual asset. The original poster clearly asked if her debt, which she acquired prior to marriage, was a marriage asset. The answer is no, IN ALL STATES. In "community property" states her spouse may be liable for that debt ONLY IF the property becomes so mixed with the couples community property that it is indistinguishable as individual property. Otherwise, the property she brings into a marriage in a community property state (both assets and liabilities) are her own.

Second, tenacy by entirety, tenancy in common, and joint tenancies are irrelevant to community property states with regard to property purchased by either individual during the marriage. In those states, a spouse automatically owns half of all property not acquired prior to the marriage, by gift, or by inheritance. For example, if you buy a home while married, and only your name is on the deed, your spouse still owns half of that home in a community property state, regardless of its legal classification as a tenancy in common, entirety, or joint tenancy.
 

Law2Doc

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I think we are not talking about the same thing, and you seem to be mixing up the "community property" focus of the prior poster with my points (which do not depend on being in a community property state).
You are focussing on the timing of the debt and I was talking about the character of the asset. There are states where under case law a professional degree has been deemed a "marital asset" if obtained during the course of the marriage (given that both spouses have been deemed to have contributed, in terms of helping and household maintenance to obtaining such). In such cases the debt used to obtain such jointly owned asset would be similarly joint (the debt goes with the asset). That jibes with your "so mixed" language above, but I don't think it depends on whether we are talking about community property, just whether the case law is as such.
As for the latter point (on property ownership), I certainly wasn't talking about a community property state -- the other poster was. I merely noted that your suggestion that each spouse own property in such a way that only the husband's share (and not the entirety) can get foreclosed on is not viable in all 50 states.
Certainly if only one party is on a deed, it is not owned jointly from the perspective of a creditor -- but that wasn't something you or I raised in prior posts...

[Just one other thing -- when you reply on this board and don't mess with the language of the quote you are responding to, it will end up in the nice shaded box, which is much easier to read -- you seem to be adding quotation marks and the like. :) ]
 

edmadison

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Most (if not all) federal student loan debts DO NOT survive death. This is actually important because if you consolidate your loans with your spouse in the same acount then you will both be responsible for each other's debts

ed